In the same week that US President Joe Biden and Chinese President Xi Jinping met in San Francisco at the APEC summit, US and Chinese market forces also came face to face in the Australian wool market as the Eastern Market Indicator rose 2% week on week.
The fortunes of the wool market are tied to our trade
partners, and from late last week the market’s momentum looked threatened by
news out of the US. An appreciation in
the Australian dollar midweek after US inflation data showed improvement would
typically impact affordability from a buyer’s perspective. Fortunately for
sellers this week, Chinese demand was heightened and a reduced offering meant
the fundamentals were strong enough to overcome exchange rate movements.
The result was all Merino categories improving and a 23ȼ
increase in the Eastern Market Indicator (EMI) to sit at 1151 ȼ/kg. In US
dollar terms the EMI finished at 748 ȼ/kg, 3.4% higher week on week. Outside of the previously mentioned drivers,
the national offering ended up 5k bales lower than initial estimates last week
and this supply-side relief likely assisted as the pass-in rate nationally was
down to 5.7%. 37,926 bales were sold
this week nationally which was just marginally below the weekly seasonal
average of 38,903.
In Sydney, 18.5MPG rose 54ȼ to 1498ȼ/kg and 17MPG increased 40ȼ to 1747ȼ/kg. Further south to Melbourne, demand was also strong, as 17MPG
jumped 51 ȼ to 1736 ȼ/kg and 18.5MPG jumped 41ȼ to 1487 ȼ/kg. The Western Market Indicator (WMI) rose 27ȼ
to 1294ȼ/kg after another strong week.
Crossbred wool did not see the same bump this week, with
Melbourne 26MPG losing 9ȼ to 571 ȼ/kg. As Investigated this week by Andrew Woods,
Crossbred wool’s seasonal proportion of Australian auction volumes is at its
smallest in September (which spurred on the most recent rally in pricing) and
as we approach Summer, supply will be a dampener on crossbred prices through to
the next Australian autumn.
Next week
Next week’s forecast offering is again expected to be around 45k bales nationally which would be a stark contrast to what markets typically handle this time of year (Figure 2). If the 45K offering eventuates then it will be an interesting test of demand.
All three centres will be selling Tuesday and Wednesday.
Premiums for quality assured wool, non-mulesed wool, are the bright light in the wool market at present, with feedback continuing to indicate demand in excess
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.
Chinese demand outweighs appreciating dollar
The result was all Merino categories improving and a 23ȼ increase in the Eastern Market Indicator (EMI) to sit at 1151 ȼ/kg. In US dollar terms the EMI finished at 748 ȼ/kg, 3.4% higher week on week. Outside of the previously mentioned drivers, the national offering ended up 5k bales lower than initial estimates last week and this supply-side relief likely assisted as the pass-in rate nationally was down to 5.7%. 37,926 bales were sold this week nationally which was just marginally below the weekly seasonal average of 38,903.
In Sydney, 18.5MPG rose 54ȼ to 1498ȼ/kg and 17MPG increased 40ȼ to 1747ȼ/kg. Further south to Melbourne, demand was also strong, as 17MPG jumped 51 ȼ to 1736 ȼ/kg and 18.5MPG jumped 41ȼ to 1487 ȼ/kg. The Western Market Indicator (WMI) rose 27ȼ to 1294ȼ/kg after another strong week.
Crossbred wool did not see the same bump this week, with Melbourne 26MPG losing 9ȼ to 571 ȼ/kg. As Investigated this week by Andrew Woods, Crossbred wool’s seasonal proportion of Australian auction volumes is at its smallest in September (which spurred on the most recent rally in pricing) and as we approach Summer, supply will be a dampener on crossbred prices through to the next Australian autumn.
Next week
Next week’s forecast offering is again expected to be around 45k bales nationally which would be a stark contrast to what markets typically handle this time of year (Figure 2). If the 45K offering eventuates then it will be an interesting test of demand. All three centres will be selling Tuesday and Wednesday.
Have any questions or comments?
Click on graph to expand
Data sources: AWEX| Mecardo
Categories
Have any questions or comments?
Australian wool in review 2024-25
The 2024-25 season was one of continued weakness in apparel fibre prices and drought in south eastern sheep regions. This article takes a look at
Slow and steady start to the new season
The Australian wool market opened the 2025/26 season on a steady note, with the Eastern Market Indicator (EMI) rising 1 cent to close at 1,208
RWS premiums for quality wool
Premiums for quality assured wool, non-mulesed wool, are the bright light in the wool market at present, with feedback continuing to indicate demand in excess
Wool wraps up without a bang
In a fitting end to a season marked by volatility and tight supply, the wool market held firm in the final sale of the 2024–25
Want market insights delivered straight to your inbox?
Sign up to the mailing list to get regular updates to new analysis and market outlooks
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.